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It's still anyone's game in mobile payments

January 8, 2014 by Jim Ghiglieri — Senior Vice President, Corporate Communications, SHAZAM

In a previous blog post, I wrote about some of the reasons mobile technology needs financial institutions. In this blog, I'd like to follow-up with some concluding factors that make FIs central to mobile technology's widespread adoption and success.

Community FIs don't have to wait on the sidelines as other players move into the market. The opportunity for FIs to be one of the first to market in the eyes of the consumer is still alive and well. Very few non-traditional players have made successful inroads in the way of market dominance. It's still anyone's game.

One of the most significant barriers to consumer acceptance and use of mobile payments is the question of security. According to an early 2013 Accenture survey, 45 percent of smartphone users named security as their number one concern regarding mobile payments.

FIs have an edge here. A recent survey found that 79 percent of consumers are interested in using a digital person-to-person payments service provided by their FI.

Consumer confidence in the security of FI-sponsored mobile payments platforms; in FIs' knowledge of how to provide a secure and reliable payments service; and in the ability of FIs' existing infrastructure to carry out mobile payments are three qualities that give them a major leg up.

A recent National Automated Clearing House Association white paper looks at emerging payments trends and an FI's role, or potential role, in the space. The paper points out that FIs must realize the effect developments such as mobile payments, real-time payments, and payments convergence have on customer expectations. This underscores the need to ensure that the checking account remains at the center of the payments industry.

It's equally important for payments industry leaders to remember that the mobile payment offerings most likely to trigger widespread adoption will deliver significant customer value in the form of convenience, while protecting consumers' identity, privacy, and security.

FIs' unique combination of consumer trust, checking account offerings, payments industry knowledge, and existing payments infrastructure make it clear that mobile technology needs FIs to propel mobile payments into the mainstream.

On the flipside, FIs might also need mobile technology, as consumers of the future will be looking for more from their checking accounts than they are getting today.

As mobile commerce eventually reaches critical mass, consumers will most likely pick a provider and stick with them. Hopefully, the nation's community FIs will be properly positioned to be the provider of choice when that time comes.

Read more about mobile banking.

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